The move comes after the US Federal Reserve announced an interest rate hike on reserve balances by 25 basis points to a range of 5-5.25%.
And the Central Bank of the United Arab Emirates has decided to maintain the price that applies to borrowing short-term cash from the Central Bank through all existing credit facilities at 50 basis points above of the base price.
The base rate, which is tied to the interest rate on reserve balances approved by the US Federal Reserve, determines the overall monetary policy stance of the central bank and also provides a minimum effective interest rate for the country’s overnight money market rate.
In Saudi Arabia, the Saudi Central Bank decided to increase the repo rate by 25 basis points to 5.75%.
It also decided to raise the reverse repo rate by 25 basis points to 5.25%, “in line with its objective of maintaining monetary stability”, according to the official news agency.
On the other hand, the Central Bank of Bahrain has decided to raise the base interest rate on one-week deposits from 5.75% to 6%.
The interest rate on demand deposits was also raised from 5.50% to 5.75%, and the interest rate on four-week deposits was raised from 6.50% to 6.75%.
The interest rate imposed by the Central Bank on retail banks in exchange for loan facilities was raised from 6.75% to 7%.
The Central Bank of Bahrain said it “continues to monitor international and domestic market developments, in order to take all additional measures necessary to maintain the monetary and financial stability of the Kingdom.”
For its part, the Central Bank of Qatar said on Wednesday that it would keep interest rates on deposits, loans and redemptions unchanged.
The bank added in a statement that it was seeking to keep interest rates at an appropriate level to support sustainable economic growth, according to Reuters.
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